MicroStrategy Will Offer $600M in Convertible Notes to Buy Bitcoin

MicroStrategy, the leading corporate holder of Bitcoin (BTC), has announced plans to raise $600 million through senior convertible notes to expand its Bitcoin reserves further, as confirmed by its founder and chairman, Michael Saylor.

On March 4, Saylor announced that MicroStrategy is seeking to raise over $600 million through senior convertible notes, a type of debt security that can be converted into equity at a later date.

MicroStrategy Announces Proposed Private Offering of $600 Million of Convertible Senior Notes $MSTR https://t.co/PEN5dxesIb

— Michael Saylor⚡️ (@saylor) March 4, 2024

The company anticipates granting initial purchasers the option to acquire up to an additional $90 million aggregate principal amount of the notes. The maturity date is March 15, 2030 (unless they are repurchased, redeemed, or converted earlier as per their terms).

Notably, the notes offer the flexibility of conversion into cash, shares of MicroStrategy’s class A common stock, or a combination of both.

The announcement was met with a positive reaction from the crypto community, some even joking that MicroStrategy intends to scoop every last BTC on the market.

MicroStrategy on a Buying Spree

Michael Saylor is likely doubling down on his BTC buying spree given that MicroStrategy’s stock, MSTR, recently outperformed the S&P 500, Nasdaq, and Dow Jones by quite a large margin, and it’s most likely due to the company’s substantial BTC exposure.

It didn’t take long for Bitcoin to react to the news —topping $68K an hour later or so. As such, BTC surged 8% on Monday and is up nearly 30% in the last seven days. The price has since retraced a bit to trade around $67K at the time of this writing.

Analysts are now quite optimistic about their forecasts, some eyeing over $100k in price for this or the following year.

MicroStrategy currently holds approximately 193,000 BTC, acquired at a total cost of over $6 billion. With the recent surge in Bitcoin’s value, MicroStrategy boasts an unrealized profit of $6 billion on its BTC holdings, effectively doubling its initial investment in just over three years.